GOODWILL AND ACQUIRED INTANGIBLE ASSETS

9 Months Ended

Sep. 25, 2016

NOTE 4 – GOODWILL AND ACQUIRED INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by segment were as follows (in millions):


	Aeronautics		MFC			RMS			Space Systems		Total

Balance at December 31, 2015	$	171		$ 2,198			$ 6,738		$	1,588		$ 10,695

Purchase accounting adjustments		—		—			89			—		89
Divestitures		—		—			(7	)		—		(7)
Foreign currency translation		—		(8	)		24			(2)		14

Balance at September 25, 2016	$	171		$ 2,190			$ 6,844		$	1,586		$ 10,791

Acquired intangible assets consisted of the following (in millions):


	September 25, 2016						December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-Lived:
Customer programs	$	3,204	$	(214)	$	2,990	$	3,127	$	(38)	$	3,089
Customer relationships		380		(82)		298		137		(59)		78
Other		111		(81)		30		111		(72)		39
Total finite-lived intangibles		3,695		(377)		3,318		3,375		(169)		3,206
Indefinite Lived:
Trademarks		887		—		887		816		—		816
Total acquired intangibles	$	4,582	$	(377)	$	4,205	$	4,191	$	(169)	$	4,022

Acquired finite-lived intangible assets are amortized to expense over the following estimated useful lives: customer programs from nine to 20 years, customer relationships from four to 10 years, other finite-lived intangible assets from two to 10 years. During the quarter and nine months ended September 25, 2016, we continued to obtain information and refine the appraisals of the fair values of intangible assets related to the Sikorsky acquisition. For further details on changes in intangible asset values refer to “Note 3 – Acquisitions and Divestitures”.

Amortization expense from continuing operations for acquired finite-lived intangible assets was $82 million and $203 million for the quarter and nine months ended September 25, 2016 and $7 million and $22 million for the quarter and nine months ended September 27, 2015. Estimated future amortization expense is as follows: $58 million remaining in 2016; $258 million in 2017; $248 million in 2018; $246 million in 2019; $242 million in 2020; $238 million in 2021 and $2.0 billion thereafter. Our estimates of amortization expense for finite-lived intangible assets are subject to change, pending the final determination of the fair value of intangible assets acquired in connection with the Sikorsky acquisition (See Note 3).

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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